CONGRESSWOMAN ELISE STEFANIK
On Tuesday, April 9, 2013, the House is scheduled to consider H.R. 254, the Bonneville Unit Clean Hydropower Facilitation Act, under a suspension of the rules. The bill was introduced on January 15, 2013 by Rep. Jason Chaffetz (R-UT) and referred to the Committee on Natural Resources, which reported the bill by unanimous consent.
H.R. 254 helps to facilitate hydropower development in the Diamond Fork System, located within the Central Utah Projects’ Bonneville Unit, by removing significant administrative barriers. H.R. 254 indefinitely defers the $106 million in payments required of developers, which to date has prevented any hydropower development within the Diamond Fork System, in order to make development economically feasible. Developers will still be responsible for the costs of providing power and for making lease payments to the federal government. The bill also specifies that the Western Area Power Administration (WAPA) is not responsible for purchasing or marketing any of the power produced by the Diamond Fork plant and that the project is not eligible for funding under WAPA’s borrowing authority.
Under current law, the beneficiaries of Bureau of Reclamation projects are required to pay back the capital costs associated with construction of the projects, usually with interest, under a cost allocation formula created by the Bureau. Under the current cost allocation formula, hydropower developers must pay $106 million to the U.S. Treasury as part of installing any hydropower infrastructure at Diamond Fork. As a result, no development has taken place and the government has therefore not received any lease revenue, which is normally collected when a developer pays a charge for utilizing the Bureau’s infrastructure to generate hydropower.
By indefinitely deferring the $106 million in repayments, similar to deferrals made with respect to costs addressed within the Central Utah Project Completion Act (P.L. 575), H.R. 254 will remove a major hurdle to hydropower development and will allow the federal government to begin receiving revenue in the form of lease fees. CBO estimated in 2012 that lease fees could total about $600,000 per year, a much more economically viable situation for developers than the over $5 million per year that is required under current law.
Similar legislation, H.R. 2008, passed the House in the 111th Congress on June 8, 2010 by voice vote.
CBO estimates that enacting H.R. 254 would generate $4 million of new revenue in the form of lease payments over the 2014-2023 period. Enacting the bill would decrease direct spending; therefore, pay-as-you-go procedures do apply.